With the dire financial situation that most states in Nigeria have arrived at, it is apt to look back at, perhaps more than other reasons, the major cause of states’ financial distress: borrowing, and this goes a long way back for many of the states.
To chart the way forward so that such unspeakable hardship of irregular salaries is not thrust on hapless citizens as has been the case for quite a few years, people who have gained nothing from all the borrowings that states have embarked on, especially since the dying days of the first term of Obasanjo presidency, those charged with leading the states as governors must deviate from what led to their states’ predicament.
It is about Osun State but would fit the situation in just about all the states. State governors must not continue on reckless borrowings to finance fancy projects without factoring the long-term effects.
TOLA. July 1, 2015
Two Sundays ago, I closed with a plea to Alhaji Bello and Osun law makers not to say ‘yes’ to a loan of [equivalent] over $120m because Brigadier Oyinlola has too short a time left in his term to make effective use of such a large facility. I will refer to two past essays from the now rested Sunday Comet – “Letter to all governors: Re: ‘Deficit Accounts’ of June 29, 2003 and “Letters to my niece: governors discover another mine” of October 2002. A short excerpt from the ’03 essay first:
“What I believe discerning voters would like to know from Ondo, Osun, Kwara … is simple: in full-page ads in a couple of newspapers popular in your states, show how much overdraft is being owed and to which banks, the dates taken; how much in foreign loans … the dates taken and who was the governor … military or civilian …
“In the recent past, I’ve had cause to write about states’ profligacy when Chief Adebayo went to the capital market to borrow billions of naira supposedly to enable him carry out development projects, mere months before the election …
“… I wondered in ‘Governors discover another mine’ how Adebayo could feel good riding in convoys that cost more than his internally-generated revenues …. These bonds that yield instant cash, though due ten, twenty, twenty-five years are like credit cards … it will provide the heady rush that credit card junkies report when they go on spending sprees … feeling empowered by the ability to buy anything until … Thousands and thousands will work for food in Ghana that has learnt to live within its means … Borrowing to finance market or road construction or ‘other capital assets for developments’ is ‘voodoo economics’… the fancy ‘Reaganomics’, architect of today’s corporate greed …”
Here is from the October 2002 essay:
“You know, of course, how passionate (parochial?) I am about Ekiti. When I read recently that the governor [Niyi Adebayo of the AD] went to the capital market to raise four billion naira or so, I almost stopped breathing. Lagos had earlier done it and I had been merely concerned, but just merely. After all, Lagos can pay the banks which undertook to lend … Correct me, dear, if I am wrong: isn’t a bond given for a certain amount at a certain rate and due on a pre-ordained date? … could lose value if interest rates rise which is generally the case here; once up, forever up! …
“Isn’t this the same as what happened in the past though under the description of “loans from external donors” which has left most states impoverished? Ask Governor Akande of Osun State who has been saying … how the federal government intends to start deducting N148 million naira monthly (or is it quarterly?) from its allocation … There have been all sorts of loans by past administrations … and from debts the man met, including several months’ salaries, there is nothing to show for the spend-mania …
“What did the administrations of three or so military governments and one civilian do with the loans? Well, you know I’m Osun by marriage and I travel the state fairly well but I can find nothing that resembles this kind of huge indebtedness … The secretariat built during those administrations is a jumble ramshackle resembling more a war camp than where people were supposed to sit all day and plan the take-off of a new state.
Talking of ‘take off’ … what happened to the tons of money for take-off many years ago? The befitting edifice the state has built now could not have been done if the present administration has been on a spending binge …
“You are a kid, Yewande, dear, but for those of us who’ve been around longer than the ascendancy of this country to the big league in stealing, fraud … if you spoke to somebody more skeptical than me, you’ll probably be told that the loans never left the country(-ies)of origin. Take-off grant: Did not cross the border into Osun, either; most of it, that is … based on evidences on the ground – there are no projects to show where these monies were spent …
“As someone who understands the implications of these borrowings even if not the working, I believe it is time each state works towards enacting legislations that would ensure that governors cannot borrow amounts in excess of what they can liquidate during their four-year term. A governor who borrows a huge amount (as it is being done now in the dying days of their terms) and cannot liquidate it AND also fails to win reelection must have to pay the state back. If he wins reelection, he must ensure liquidation before leaving or else he has to sell some of the stolen loot to pay off the loan.
“Unless something like this is put in place, the future of your generation and those to come are being mortgaged to banks with the proceeds not really showing up as in the case of Osun and many other states … In spite of President Obasanjo’s fasting and deployment of prayer warriors, Nigeria may still break … Those handouts from the Federation Account will be no more and what happens to those loans?
“… I do know from practical experience that cities and counties do raise municipal bonds in a place like the U.S. and when we get the property tax statements, each property owner is assessed part of this bill because it was raised to improve the community. Before such bond issues are embarked upon, it would have been voted upon so that those to pay the bill have a say in incurring it … In Nigeria … we the people, whose descendants for generations will pay … in every way imaginable, do not have a say …”
The same reasons that made me write above two essays several years ago were, and still remain my guide: good journalism – the end result as opposed to the craft as that can only be judged by readers – the greater good which sees and points out the ills of society with the goal of making things better for all, as well as point out to those in government or out of it who may be working against the interest of the masses who, ideally, are the ones they serve should serve. Even the former president whom I used to support like most journalists in the early going was not treated specially once he changed long before his third term ambition; my essays that concerned him also changed. THAT is the nature of journalism if practiced as it should be: without fear or favor.
The Osun loan is NOT in the interest of the state’s citizenry.
This essay was first published in The Nation on Sunday on May 9, 2010 & was first used on this blog on January 13, 2013.